China Currency Reform - Michael Samuels IBUS 160 Helm China...

Michael Samuels 12/4/08 IBUS 160 Helm China Currency Reform The Chinese over the past several decades maintains its status as the fastest growing emerging market in the world. China’s GDP has grown on average more than 10% each year over that period of time. They have done so by maintaining an extremely high trade surplus and low currency valuation. Recently, over the last three years or so, China has made an effort to increase the value of its currency in relation to the dollar in order to ease trade tensions between it and the United States. With the current economic downturn China has reverted course and recently allowed the Yuan, its currency, to decrease in value to its lowest point in five months. Treasury Secretary Henry Paulson traveled to Beijing to discuss China’s economic policies to ensure this pattern would not persist. The U.S. trade deficit with China reached an all time high in October, reaching an outstanding $27.8 Billion. China had fixed its currency to the U.S. dollar which allows

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